Efficiency is key for the energy transition
Energy efficiency is considered the first strategy for a global sustainable energy system and key in achieving a short-term energy transition.
What is energy efficiency? Differences between energy efficiency, consumption, and energy savings
Energy efficiency and savings have a common purpose: to reduce energy consumption. However, their strategies for achieving this goal are distinct.
Energy efficiency seeks to maintain a low level of energy consumption during activities by adopting certain measures and systems without affecting performance. On the other hand, energy savings aim to reduce consumption by creating new habits that may affect comfort and production. For example, to reduce energy consumption in heating, energy efficiency can be improved by substituting the heating system with another more efficient one, or improvements can be made to the thermal enclosure to achieve those reductions without penalising heating comfort. Meanwhile, if we limit the hours of use for the heating, we can achieve savings, but we reduce comfort.
Why is energy efficiency so important?
Energy efficiency is one of the easiest ways to eliminate energy waste and reduce associated costs. Specifically, by using energy more efficiently, we can reduce demand, which would mean lower bills for consumers, lower greenhouse gas (GHG) emissions, less need for energy infrastructure, and greater energy security through the reduction of imports.
Thanks to its characteristics and the many benefits it offers, energy efficiency is considered "the first strategy" for a global, sustainable energy system.
Do we have energy efficiency improvement targets?
In 2007, the European Union set the target of improving energy efficiency by 20% by 2020. Later in 2018, as part of the "Clean energy for all Europeans" package, a new, more ambitious target was set to improve energy efficiency by at least 32.5% by 2030. The commitment by the European Union has continued to grow, and in July 2021, a revised proposal of the Directive on energy efficiency was presented. It aims to set an even higher target to reduce the consumption of primary energy (39%) and final energy (36%) by 2030.
In 2020, Spain generously exceeded the shared target of 20% with a 35.4% improvement in energy efficiency. The National Integrated Energy and Climate Plan (PNIEC, for its Spanish initials) set the target of improving the country's energy efficiency by 39.6% by 2030.
Energy efficiency: primary challenges
Various challenges may present themselves in the attempt to meet energy efficiency targets. High costs of initial investments, difficulties accessing funding, asymmetric information, and the uncertainty surrounding future costs of energy and regulations could limit the expansion of energy efficiency improvements.
European and Spanish administrations have developed a wide range of measures to stimulate businesses and homes to invest in energy-saving technology to mitigate these obstacles. From market-based instruments (subsidies, environmental taxes, and tax credits) to mandates and control mechanisms (regulations that establish limits and standards) to proposals to improve knowledge and awareness. In any case, it's important to note that the majority of the energy efficiency policies and measures are not implemented as part of any energy-related package, but they often form part of broader legislative packages.
The role of energy efficiency to fight energy poverty
Energy poverty describes a situation in which a household cannot afford a sufficient amount of electricity for its needs or when that household must dedicate a disproportionate amount of its income to cover the cost of electricity.
Improvements in energy efficiency are an effective solution to mitigate this problem in the medium and long-term as they can reduce electricity spending without compromising comfort or quality of life.
However, renovation work can often be pricey and thus less accessible to vulnerable households. For the first time in 2020, the government of Spain introduced special support for vulnerable populations affected by energy poverty in its programme for energy renovation in buildings.